The rebound of China’s economy from the pandemic meant that the contraction in global stainless steel consumption last year was less than declines seen at the time of the global financial crisis of 2008 and 2009.
The perspective came from Olivier Masson, senior analyst at Roskill, who was a guest speaker at the BIR Stainless Steel and Specialty Alloys committee meeting at the last BIR convention, which is being held online.
The 2.4% drop in global stainless steel consumption last year may have been less than the global financial crisis, but it masked sharp year-over-year declines in the United States (-17%), Europe (-9%) and Japan (-6%). Indeed, consumption growth of more than 6% in China is due to its government’s metal-intensive stimulus package.
Market dominance
Masson’s presentation reflected the consolidation of China and Indonesia as key elements in global stainless steel developments. Their combined share of total stainless steel production rose from 52% in 2015 to 64% last year. Given their continued heavy reliance on primary nickel units, the global scrap rate in stainless steel production has fallen to around 37% in 2020 from nearly 42% five years earlier.
He said Roskill is looking at a gradual increase in scrap metal usage in China, but only “a very, very small one” due to the increased availability of NPI. If China puts a cost on carbon emissions and on the environmental footprint of raw material production processes, it could lead to greater use of scrap metal, Masson said.
Masson concluded by saying that the stainless steel industry is recovering well from the severe impacts of the pandemic and is likely to remain the main driver of nickel demand. The battery market, especially for electric vehicles, was to become the second largest user of nickel units “by a significant margin”.
battery growth
Guest speaker Alina Racu, nickel market analyst at Nornickel, predicted that the long-term growth in nickel demand would come from the battery sector, boosted by “green” legislation. She estimated that the nickel units needed to produce batteries would increase four or five times by 2030.
The market was concerned about the availability of suitable nickel units to meet this huge increase in demand from the battery industry. Potential sources listed by Racu included exchange stocks, high-pressure acid leach mining projects and the conversion of nickel matte to high-grade Ni, while an increase in NPI production would create a change of use of nickel units, it was argued. It would take another 10 to 20 years for significant quantities of used vehicle batteries to become available for recycling, she added.
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